The Permian Basin has become a massive growth engine for the U.S. oil industry over the last few years. The driving force has been the discovery of new techniques that have unlocked the treasure trove of oil and gas trapped in the region’s tight underground rock formations. That has unleashed a wave of drilling that’s sent output soaring. Oil companies are now producing an ever-increasing gusher of cash flow thanks to the region’s low drilling costs, higher oil prices, and efficiency gains.

While the industry had been plowing that money into drilling more wells and acquiring additional land, it has recently reached an inflection point; many drillers no longer need to invest as much money to maintain a healthy growth rate. That has freed them up to allocate that cash to other activities. For the most part, they’re returning their growing windfalls to shareholders through higher dividends and stock buybacks.

Expect more money to continue flowing to investors

Oil companies are starting to reap the rewards of their investments in the Permian Basin. Many are now hauling in more cash than they need to fund growth, which is allowing them to send that money back to shareholders through rapidly rising dividends and significant share repurchase programs. That trend appears poised to continue as the industry turns this low-cost, oil-rich region into an ATM for investors.